St. Jude Invests in Spinal Modulation

St. Jude Medical Inc., a St. Paul, Minn.-based medical device maker, has begun to execute a series of agreements made with Menlo Park, Calif.-based Spinal Modulation Inc. The Minnesota medical device giant made a $40 million equity investment in the California company, which has developed a neuromodulation therapy that provides a new pain management option for patients with chronic, intractable pain. The agreement provides St. Jude with an exclusive option to distribute the Axium neurostimulator system, developed and manufactured by Spinal Modulation, in international markets where it is approved for sale. Str. Jude also will have the exclusive option to acquire the company for up to $300 million plus certain revenue-based milestones following U.S. commercialization.

The Axium neurostimulator system delivers a form of spinal cord stimulation (SCS) targeting the dorsal root ganglion (DRG). DRG are small structures that contain nerve fibers, which carry signals to the brain. Stimulating the DRG addresses chronic pain conditions that, according to St. Jude, are currently underserved by traditional SCS technologies and techniques, providing more targeted therapy to patients who have lower extremity pain or very specific areas of pain that are known to be difficult to treat with traditional neurostimulation systems.

“St. Jude Medical is excited to partner with Spinal Modulation and add the unique and complementary Axium Neurostimulator System to our existing neuromodulation portfolio,” said Eric S. Fain, M.D., president of the St. Jude Medical Implantable Electronic Systems Division. “This investment in our neuromodulation business further demonstrates St. Jude Medical’s commitment to transforming the treatment of debilitating conditions, including chronic pain, which impacts about 10 to 13 percent of the adult population and carries an economic burden of billions of dollars annually.”

Unlike traditional SCS technologies that work by placing leads along the dorsal column, the Axium neurostimulator system’s leads are placed at the DRG and provide targeted stimulation to areas that are typically hard to treat—including the lower leg, foot and groin—and uses approximately 95 percent less power than traditional SCS therapy, according to the companies. There is a growing body of clinical evidence, including numerous peer-reviewed publications, substantiating the scientific approach of this treatment.

“Spinal Modulation is very pleased to begin working with St. Jude Medical to expand the market for chronic pain management and further develop neuromodulation solutions that effectively cover the entire body—head to toe, limb to limb,” said David Wood, president and CEO of Spinal Modulation. “We look forward to collaborating with St. Jude Medical which, through its global scale, expertise and resources, will help us expand the reach of our innovative therapy to more physicians and patients around the world.”

The Axium neurostimulator system received CE mark approval in November 2011 for the management of chronic, intractable pain. The system is not approved for use in the United States. The company has received an investigational device exemption from the U.S. Food and Drug Administration and anticipates beginning enrollment for a clinical trial in the second half of this year.

Spinal Modulation, which focuses specifically on technology to stimulate the DRG to manage chronic pain, is funded by Johnson & Johnson Development Corporation, Medtronic, Kleiner Perkins Caufield and Byers, De Novo Ventures, MedVenture Associates, and DFJ InCube Ventures.